momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.It brings together, managers from the agricultural world and important people from external perspectives, such as health, development, strategy and defense. Its objective is to promote regulationof agricultural markets by creating new evaluation tools, such as economic models and indicators,and by drawing up proposals for an agricultural and international food policy.

Agricultural crisis: The Germans are getting involved and it is a good thing

September 12, 2016

Although the clout of its agricultural sector predisposes it to play a proactive role in this field, France is far from having the monopoly on ideas in terms of agricultural market regulation. Some recent proposals driven by Albert Dess, a German member of the European Parliament for the European People’s Party, are showing that there is no lack of inspiration on the other side of the Rhine.

On June 8, 2016, the EPP Group adopted a series of 15 proposals to address the agricultural crisis1. Overall, they aim to provide concrete solutions to improve the functioning of the food supply chain, and maximize market intervention measures.

Imbalances in negotiation power between producers and distributors are being singled out. More specifically, the EPP calls for the effective implementation of the provisions of the Late Payment Directive, which sets the maximum payment deadline at 30 days. The certification systems are also condemned, since their costs are mostly borne by producers, and lead to “the substitution of governments in the task of monitoring the food sector”. It also advocates a better compliance with contractual commitments to “make it impossible for distributors to unilaterally terminate contracts when prices are falling”. Last but not least, the EPP wants to have printed, on all retailers’ packaging, the own brand or name of the producing firm “with at least the same print size of the retailers’ name”.

In these overproduction times, the EPP makes a plea for reactivating or developing disposal measures. This is the case for butter in the bakery industry “to replace palm oil, which is imported from third countries, and sometimes produced in dubious environmental conditions.” More generally, in-kind support to the most deprived people––including in the framework of humanitarian aid abroad––is encouraged.

The temporary cut in dairy production is also stated in the grievances, as well as its expansion to the pork sector. Calling for the implementation of a market observatory for fruit and vegetables along the lines of those existing for milk and meat, the EPP hopes that such observatories be “proactive in preventing market crises by integrating early warning mechanisms.”

With regard to market intervention measures, the realization of their limitations in terms of reactivity and flexibility calls for an overhaul of their operations. The EPP is asking the Commission to propose “a new ‘ad hoc’ intervention system to eliminate from market prices, in a flexible way and according to market conditions, the necessary volumes of butter and skimmed milk powder through a swift procedure without prior notice.”

The current system is certainly not reactive enough, and procedures are carried out according to timescales that are totally different from the market reality and volatility. In addition, since measures are announced in advance, market operators can misuse them, a fact that reduces their effectiveness. Lastly, releasing reserves without interfering with cyclical reversals also requires more finely tuned monitoring than that allowed by existing rules.

In the end, the EPP position outlined in this statement seems to take full measure of the current crisis by proposing to reform intervention measures, which together with counter-cyclical aid are an integral part of the Momagri-CAP proposal. While the EPP assembles European members from all member states, the German influence has been significant in drafting these often-bold proposals. The is little doubt that they will partly inspire the work of the “Agricultural Markets” taskforce, which must release its report in the coming months. Let us also hope that these proposals find a sympathetic ear in the European Commission, and might be the root of a revival of European solidarity in agricultural issues.